Formulation of billing policy for residential scale solar PV systems and its impact in the Kingdom of Saudi Arabia

Abstract

Governments worldwide have introduced diverse billing methods and regulations to promote the adoption of photovoltaic (PV) systems, aiming to reduce greenhouse gas emissions. This paper aims to develop a billing policy for installing rooftop PV systems in the Kingdom of Saudi Arabia by studying policies implemented to support installing PV systems in leading countries. Initially, the system is evaluated using the tariff predetermined by Saudi Electricity Cogeneration Regulation Authority under three different policies: a Feed-in Tariff (FIT), net metering, and net billing for different sizes of solar systems 10 KW, 15 KW, and 20 KW. The findings indicate a significant discounted payback period of 14–20 years within the net metering framework, illustrating a protracted return on investment. Thus, implementation of solar subsidies by the state becomes crucial to abbreviate this payback timeline. In succession, a tariff schedule, tailored according to the consumer-preferred payback period, is proposed. For a payback timeframe of 6–10 years, the tariff should range between $0.09–0.06 $/kWh within the FIT scheme. However, in the case of a net billing policy, the tariff should vary between $0.123–0.066 $/kWh. These findings suggest the supremacy of the FIT scheme, particularly if the government determined to use the low tariff policy.